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This week, the most significant event for cryptocurrency enthusiasts is the Federal Reserve’s statements. The anticipated scenario of a considerable slowdown in interest rate cuts has materialized. Additionally, Powell’s firm stance on Bitcoin 
$106,335 is a major contributing factor to the overall decline in cryptocurrencies.
Powell’s Position on Bitcoin
Powell, who will serve at the Fed for at least another two years, cannot be easily removed like other public officials. Trump acknowledged that it wouldn’t be wise to dismiss Powell for economic stability, allowing him to remain until his term ends in 2026.
Moreover, it is not easy to remove Fed chairpersons. If Trump had attempted it, it would likely lead to a legal battle with a strong chance of Powell winning. Beyond this, Powell explicitly stated that the institution would not accumulate Bitcoin, emphasizing that such an action would require legislative backing.
Reasons for Cryptocurrency Decline
Despite Powell’s remarks, it remains uncertain whether Republicans can pass this law, even with their strength in both the Senate and House. The likelihood may not be as high as 50%, as some Republicans are hesitant on the matter. If Trump cannot convince them that “this will definitely happen,” the chances for the law’s passage are minimal.
Amidst the decline of BTC, altcoins are also rapidly losing value. The risk of Ethereum 
$2,505 dropping to $3,100 after losing $3,800 is evident, and the ongoing struggle with the BTC parity at the 0.036 level inhibits new resistance testing at $4,100.
After today’s announcements, the following reasons explain the cryptocurrency drop:
- One or two interest rate cuts are expected in 2025.
- The Fed is uncertain about achieving a 2% inflation target over two years.
- Powell opposes BTC reserves.
- There is a risk of interest rate hikes if inflation does not continue to fall.
- If employment remains strong and inflation does not decrease, there may not be two interest rate cuts next year.
- We have transitioned from discussing interest rate cuts to confirming a pause in cuts.
- There is a 90% chance that there will be no interest rate cuts in January, keeping rates steady.
- The dollar index has reached record levels after months.
- U.S. stock markets are experiencing declines.
